The Caterpillar Foundation’s diverse portfolio has included plenty of water-related projects over the years, but a recent agreement with Water.org has the organization placing a big bet on the microfinance industry’s ability to expand access to sanitation in the developing world. (See Caterpillar Foundation: Grants for Global Development).

Caterpillar and the Matt Damon-backed Water.org inked an agreement for a three-year campaign to inject $3 million into the charity’s WaterCredit program. The money will benefit an estimated 218,000 people in India, who will get greater access to credit for installation of hygienic sanitation facilities. The project will also include some stage-setting for a potential expansion of the program to Indonesia.

Caterpillar has financed Water.org projects in the past, so the charity’s familiarity no doubt helped grease the grantmaking skids. But the foundation was also encouraged to make the bulldozer-sized investment by the idea that the money would provide ongoing assistance.

"The sustainability of Water.org’s model is really what drew us to WaterCredit," Caterpillar Corporate Public Affairs Director Jim Baumgartner says. "This program will provide clean water and sanitation facilities to thousands of families in India, but the cycle of progress will continue as the loans are repaid and these funds are provided to others in need."

But if you take a closer look, you’ll see there is a little more reasoning behind the foundation’s new venture. While the scale of the donation is unusual, Caterpillar’s investment in India is not. Caterpillar has financed a variety of projects in India — for example, the Aksha Patra Foundation, an Indian nonprofit that provides meals to children. So the Water.org project fits into a pattern that is more geographical than sectoral.

In fact, in many cases the money could benefit Caterpillar employees and their families and friends. One area of focus for the Water.org grant is the city of Bangalore, where Caterpillar maintains an accounting division and other services. Another area of focus in India will be Tamil Nadu, where the company designs and produces backhoe loaders, internal combustion engines, and a variety of other equipment.

This geographical focus offers a window into the Caterpillar Foundation’s decision-making process. A good company will give back to its community, and a smart company will do what it can to help that community thrive and grow. Caterpillar is doing both with its investments in water and sanitation in India.